BILL ANALYSIS �
AB 1101
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Date of Hearing: April 13, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1101 (Eng) - As Introduced: February 18, 2011
Policy Committee: Public Employees,
Retirement and Social Security Vote: 4-2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill replaces the governor-appointed retiree representative
on the Teachers' Retirement Board with a representative elected
by the retirees of the California State Teachers' Retirement
System (CalSTRS). Specifically, this bill:
1) Replaces the board member who must be a retired member of
either the CalSTRS Defined Benefit program or the Cash
Balance Benefit program and be appointed by the Governor,
with a new board member who will be elected by the retired
members of the DB Program and the retired participants of
the CB Benefit Program (a program for employees who are not
full time).
2) Specifies the term for this new aboard member is four
years, beginning January 1, 2016.
FISCAL EFFECT
1) CalSTRS indicates that additional election costs for the
seat (which would occur every four years) would be about
$75,000 for staff and vendor expenses, and would coincide
with the election for the other seats.
2) Unknown impacts on CalSTRS investments and earnings.
COMMENTS
1) Rationale . The California Federation of Teachers, the
bill's sponsor, states that, "AB 1101 will allow retirees to
AB 1101
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have a united voice on their retirement issues by changing
the retiree representative on the Teachers Retirement Board
from one being appointed by the Governor to one being
appointed by the retired members of CalSTRS. The change in
statute will allow for a more democratic process of
representation."
2) Background . The CalSTRs board of directors are selected
based on the following:
a) Three chosen in an election of current members.
b) Five appointed by the governor and confirmed by the
Senate. These must meet specified qualifications, with one
being a retired CalSTRS member, three being public
representatives, and one a school board representative.
c) Four board members who serve in an ex-officio capacity
by virtue of their office - the director of finance, state
controller, state superintendent of public instruction and
state treasurer.
Most other public retirement boards in California have
elected members. For example, the Board of Administration of
the California Public Employees' Retirement System has six
members out of 13 who are elected by their peers and each of
the 20 retirement systems being operated under the County
Employees' Retirement Law of 1937 has four members elected
by the active and retired members of the system.
1) Recent legislation. This bill is similar to AB 1862 (Eng)
of 2010, which was vetoed by Governor Schwarzenegger. In his
veto message, the Governor stated, in part, "There is no
documented problem that demonstrates the need to change
current law with this bill."
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081